Ricochet News

Over R300 million owed to Eastern Cape contractors far beyond legislated 30 days

Mar 10, 2017
Over R300 million owed to Eastern Cape contractors far beyond legislated 30 days

The Democratic Alliance (DA) on Friday called on the Eastern Cape MEC for Human Settlements, Helen Sauls-August, to ensure the payment of contractors assigned to construct low-cost houses in the Eastern Cape that are owed money far in excess of 30 days.

"The failure of the department to pay these contractors is jeopardising businesses and resulting in layoffs of hundreds of workers. This is destroying jobs and impacting negatively on local economies," said Sanele Magaqa (MPL), the DA's Eastern Cape Shadow MEC for Human Settlements.

"In a response to a written question submitted in the Eastern Cape Provincial Legislature, it is revealed that there is a total of R303 million that has not been paid to contractors for the Department of Human Settlements."

Magaqa said that it was uncovered that the following amounts were owed in municipalities around the province:

• R81 million in Alfred Nzo District Municipality;
• R7 million in Amathole District Municipality;
• R11 million in Buffalo City Metropolitan Municipality;
• R56 million in Chris Hani District Municipality;
• R36 million in Joe Gqabi District Municipality;
• R36 million in Nelson Mandela Bay Metropolitan Municipality;
• R73 million in OR Tambo District Municipality and;
• R3 million in Sarah Baartman District Municipality.

"South African legislation clearly stipulates that any business that has completed work for the government must be paid within 30 days yet there are invoices for Alfred Nzo, Chris Hani, Joe Gqabi and OR Tambo district municipalities that are over 90 days old," Magaqa added.

"This severe backlog in payments has dire consequences for small business owners and their employees as it has led to the retrenchment of hundreds of employees and it could result in the total collapse of affected companies.

"A well-run government would ensure that contractors receive timely compensation for work done. It is unfair to contractors, employees and recipients of housing that the department is conducting its affairs in this chaotic manner."

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